UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
Form 8-K
_____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): November 18, 2019
America's Car-Mart Inc.
(Exact Name of Registrant as Specified in Charter)
Texas | 0-14939 | 63-0851141 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
802 SE Plaza Avenue, Suite 200, Bentonville, Arkansas 72712 |
(Address of Principal Executive Offices) (Zip Code) |
(479) 464-9944
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, par value $0.01 per share | CRMT | NASDAQ Global Select Market |
Item 2.02. Results of Operations and Financial Condition.
On November 18, 2019, America’s Car-Mart, Inc. issued a press release announcing its operating results for the second quarter of fiscal year 2020. The press release contains certain financial, operating and other information for the period ended October 31, 2019. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. In accordance with General Instruction B.2., the information contained in Items 2.02 and 9.01 of this Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1934, as amended. America’s Car-Mart, Inc. undertakes no obligation to update or revise this information.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. 99.1 Press release announcing its operating results for the second quarter of fiscal year 2020.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
America's Car-Mart Inc. | ||
Date: November 18, 2019 | By: | /s/ Vickie D. Judy |
Vickie D. Judy | ||
Chief Financial Officer (Principal Financial Officer) | ||
EXHIBIT 99.1
America's Car-Mart Reports Diluted Earnings per Share of $2.00 on Record Revenues of $190 Million
BENTONVILLE, Ark., Nov. 18, 2019 (GLOBE NEWSWIRE) -- America’s Car-Mart, Inc. (NASDAQ: CRMT) today announced its operating results for the second quarter of fiscal year 2020.
Highlights of second quarter operating results:
“Once again, we are pleased with the quality of our work, which resulted in another solid quarter. Our work has real purpose and our associates are enthusiastically embracing efforts to continually improve the customer experience in the communities we serve. As we have said many times, we serve a large and fragmented market and we will continue to grow our customer base at a rate that matches our ability to operate at the highest levels. We believe that we have an obligation to serve more customers by growing market share in the areas we currently serve and by adding new locations over time. Our new vision statement – ‘To be America’s best auto sales and finance company in the eyes of our customers and associates while improving the communities we serve’ is our purpose, and we have a sense of urgency to get better every day,” said Jeff Williams, President and Chief Executive Officer. “We will continue to invest in our infrastructure to support a growing company as we believe that every town in America would be better with a Car-Mart dealership. We continue to elevate our offering by giving our valued customers peace of mind with their transportation needs while educating the market about our competitive advantage as to the total cost of vehicle ownership. We continue to make significant improvements with our training programs, and we will keep pushing in this critically important area. The customer experience starts and ends with the vehicle and we pledge to ‘keep our cars on the road’ with quality cars and great customer service after the sale. It’s a very exciting time to be at America’s Car-Mart and to be part of a team making such a positive difference.”
“It’s nice to see the productivity improvements which have resulted from the continued focus on our Operational Non-Negotiables. We plan to open additional locations in the future, and we believe we can continue to pick up significant market share in our current markets by further differentiating our offering from the competition,” said Mr. Williams. “We believe that there is tremendous demand for our offering and that we have significant growth opportunities over time. We have opened two new dealerships this year, and we are currently working on new dealerships in Chattanooga, Tennessee and in Cabot, Arkansas. Additionally, we have just begun work on a new dealership in Edmond, Oklahoma.”
“We were pleased to see the retail unit volume increase at 8.7% and proud to have added over 4,500 customers to the Car-Mart family in the last twelve months,” said Vickie Judy, Chief Financial Officer. “We are working very hard to grow our customer count at each dealership, and that success is also reflected in our lower net charge-offs as a percentage of average receivables (6.1% compared to prior year quarter of 6.6%). These results would not have been possible without our continued investments in our associates and infrastructure. We did have some nice leveraging as our overall selling, general, and administrative expenses decreased to 16.9% of sales, compared to 17.9% for the prior year quarter. We recognized an income tax benefit related to share-based compensation of $140,000, or $0.02 per diluted share, compared to $543,000, or $0.08 per diluted share, for the prior year quarter.”
“We repurchased 112,091 shares of our common stock during the quarter at an average price of approximately $89 for a total of $10.0 million. Since February 2010, we have repurchased 6.3 million shares (54.3% of our outstanding shares at January 31, 2010) at an average price of approximately $38. We plan to continue to repurchase shares opportunistically as we move forward. During the six-month period ended October 31, 2019, we added $43.8 million in receivables, repurchased $14.7 million of our common stock, funded $1.7 million in net capital expenditures, and increased inventory by $10.6 million, a total of $70.8 million, with only a $24.1 million increase in debt. We will continue to remain focused on cash-on-cash returns and maintaining a strong balance sheet. At October 31, 2019, our debt to equity ratio is 63.6% and debt to finance receivables ratio is 30.1%,” added Ms. Judy.
Conference Call
Management will be holding a conference call on Tuesday, November 19, 2019 at 11:00 a.m. Eastern Time to discuss quarterly results. A live audio of the conference call will be accessible to the public by calling (877) 776-4031. International callers dial (631) 291-4132. Callers should dial in approximately 10 minutes before the call begins. A conference call replay will be available two hours following the call for thirty days and can be accessed by calling (855) 859-2056 (domestic) or (404) 537-3406 (international), conference call ID #9387084.
About America's Car-Mart
America’s Car-Mart operates automotive dealerships in eleven states and is one of the largest publicly-held automotive retailers in the United States focused exclusively on the “Integrated Auto Sales and Finance” segment of the used car market. The Company emphasizes superior customer service and the building of strong personal relationships with its customers. The Company operates its dealerships primarily in smaller cities throughout the South-Central United States selling quality used vehicles and providing financing for substantially all of its customers. For more information about America’s Car-Mart, including investor presentations, please visit our website at www.car-mart.com.
Car-Mart was named to the Forbes America’s Best Mid-Size Employers list in 2019 for the second consecutive year and has sold over 650,000 vehicles since fiscal year 2000.
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements address the Company’s future objectives, plans and goals, as well as the Company’s intent, beliefs and current expectations regarding future operating performance and can generally be identified by words such as “may,” “will,” “should,” “could, “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” and other similar words or phrases. Specific events addressed by these forward-looking statements include, but are not limited to:
These forward-looking statements are based on the Company’s current estimates and assumptions and involve various risks and uncertainties. As a result, you are cautioned that these forward-looking statements are not guarantees of future performance, and that actual results could differ materially from those projected in these forward-looking statements. Factors that may cause actual results to differ materially from the Company’s projections include, but are not limited to:
Additionally, risks and uncertainties that may affect future results include those described from time to time in the Company’s SEC filings. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.
____________________________
Contacts: Jeffrey A. Williams, President and CEO (479) 464-9944 or Vickie D. Judy, CFO (479) 464-9944
% Change | As a % of Sales | ||||||||||||||||
Three Months Ended | 2019 | Three Months Ended | |||||||||||||||
October 31, | vs. | October 31, | |||||||||||||||
2019 | 2018 | 2018 | 2019 | 2018 | |||||||||||||
Operating Data: | |||||||||||||||||
Retail units sold | 13,763 | 12,667 | 8.7 | % | |||||||||||||
Average number of stores in operation | 145 | 142 | 2.1 | ||||||||||||||
Average retail units sold per store per month | 31.6 | 29.7 | 6.4 | ||||||||||||||
Average retail sales price | $ | 11,589 | $ | 11,030 | 5.1 | ||||||||||||
Gross profit per retail unit | $ | 4,935 | $ | 4,819 | 2.4 | ||||||||||||
Same store revenue growth | 12.2 | % | 11.0 | % | |||||||||||||
Net charge-offs as a percent of average finance receivables | 6.1 | % | 6.6 | % | |||||||||||||
Collections as a percent of average finance receivables | 13.3 | % | 13.0 | % | |||||||||||||
Average percentage of finance receivables-current (excl. 1-2 day) | 83.5 | % | 81.0 | % | |||||||||||||
Average down-payment percentage | 6.0 | % | 5.8 | % | |||||||||||||
Period End Data: | |||||||||||||||||
Stores open | 145 | 143 | 1.4 | % | |||||||||||||
Accounts over 30 days past due | 3.5 | % | 3.4 | % | |||||||||||||
Active customer count | 78,910 | 74,370 | 6.1 | % | |||||||||||||
Finance receivables, gross | $ | 587,087 | $ | 535,842 | 9.6 | % | |||||||||||
Operating Statement: | |||||||||||||||||
Revenues: | |||||||||||||||||
Sales | $ | 167,743 | $ | 146,411 | 14.6 | % | 100.0 | % | 100.0 | % | |||||||
Interest income | 22,567 | 20,760 | 8.7 | 13.5 | 14.2 | ||||||||||||
Total | 190,310 | 167,171 | 13.8 | 113.5 | 114.2 | ||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of sales | 99,826 | 85,366 | 16.9 | 59.5 | 58.3 | ||||||||||||
Selling, general and administrative | 28,296 | 26,198 | 8.0 | 16.9 | 17.9 | ||||||||||||
Provision for credit losses | 41,177 | 38,521 | 6.9 | 24.5 | 26.3 | ||||||||||||
Interest expense | 2,081 | 1,981 | 5.0 | 1.2 | 1.4 | ||||||||||||
Depreciation and amortization | 971 | 979 | (0.8 | ) | 0.6 | 0.7 | |||||||||||
Loss on disposal of property and equipment | 2 | 12 | (83.3 | ) | - | - | |||||||||||
Total | 172,353 | 153,057 | 12.6 | 102.7 | 104.5 | ||||||||||||
Income before taxes | 17,957 | 14,114 | 10.7 | 9.6 | |||||||||||||
Provision for income taxes | 4,070 | 2,833 | 2.4 | 1.9 | |||||||||||||
Net income | $ | 13,887 | $ | 11,281 | 8.3 | 7.7 | |||||||||||
Dividends on subsidiary preferred stock | $ | (10 | ) | $ | (10 | ) | |||||||||||
Net income attributable to common shareholders | $ | 13,877 | $ | 11,271 | |||||||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 2.10 | $ | 1.64 | |||||||||||||
Diluted | $ | 2.00 | $ | 1.58 | |||||||||||||
Weighted average number of shares used in calculation: | |||||||||||||||||
Basic | 6,621,562 | 6,865,060 | |||||||||||||||
Diluted | 6,952,667 | 7,132,217 | |||||||||||||||
% Change | As a % of Sales | ||||||||||||||||
Six Months Ended | 2019 | Six Months Ended | |||||||||||||||
October 31, | vs. | October 31, | |||||||||||||||
2019 | 2018 | 2018 | 2019 | 2018 | |||||||||||||
Operating Data: | |||||||||||||||||
Retail units sold | 26,286 | 25,200 | 4.3 | % | |||||||||||||
Average number of stores in operation | 145 | 141 | 2.8 | ||||||||||||||
Average retail units sold per store per month | 30.2 | 29.8 | 1.3 | ||||||||||||||
Average retail sales price | $ | 11,504 | $ | 11,022 | 4.4 | ||||||||||||
Gross profit per retail unit | $ | 4,912 | $ | 4,801 | 2.3 | ||||||||||||
Same store revenue growth | 7.6 | % | 11.6 | % | |||||||||||||
Net charge-offs as a percent of average finance receivables | 11.5 | % | 13.0 | % | |||||||||||||
Collections as a percent of average finance receivables | 26.8 | % | 26.0 | % | |||||||||||||
Average percentage of finance receivables-current (excl. 1-2 day) | 83.3 | % | 81.4 | % | |||||||||||||
Average down-payment percentage | 6.2 | % | 6.0 | % | |||||||||||||
Period End Data: | |||||||||||||||||
Stores open | 145 | 143 | 1.4 | % | |||||||||||||
Accounts over 30 days past due | 3.5 | % | 3.4 | % | |||||||||||||
Active customer count | 78,910 | 74,370 | 6.1 | % | |||||||||||||
Finance receivables, gross | $ | 587,087 | $ | 535,842 | 9.6 | % | |||||||||||
Operating Statement: | |||||||||||||||||
Revenues: | |||||||||||||||||
Sales | $ | 317,817 | $ | 290,512 | 9.4 | % | 100.0 | % | 100.0 | % | |||||||
Interest income | 44,371 | 40,674 | 9.1 | 14.0 | 14.0 | ||||||||||||
Total | 362,188 | 331,186 | 9.4 | 114.0 | 114.0 | ||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of sales | 188,711 | 169,534 | 11.3 | 59.4 | 58.4 | ||||||||||||
Selling, general and administrative | 56,967 | 52,580 | 8.3 | 17.9 | 18.1 | ||||||||||||
Provision for credit losses | 72,652 | 76,064 | (4.5 | ) | 22.9 | 26.2 | |||||||||||
Interest expense | 4,085 | 3,785 | 7.9 | 1.3 | 1.3 | ||||||||||||
Depreciation and amortization | 1,938 | 1,964 | (1.3 | ) | 0.6 | 0.7 | |||||||||||
Loss on disposal of property and equipment | 39 | 12 | 225.0 | - | - | ||||||||||||
Total | 324,392 | 303,939 | 6.7 | 102.1 | 104.6 | ||||||||||||
Income before taxes | 37,796 | 27,247 | 11.9 | 9.4 | |||||||||||||
Provision for income taxes | 8,398 | 5,083 | 2.6 | 1.7 | |||||||||||||
Net income | $ | 29,398 | $ | 22,164 | 9.2 | 7.6 | |||||||||||
Dividends on subsidiary preferred stock | $ | (20 | ) | $ | (20 | ) | |||||||||||
Net income attributable to common shareholders | $ | 29,378 | $ | 22,144 | |||||||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 4.42 | $ | 3.21 | |||||||||||||
Diluted | $ | 4.21 | $ | 3.11 | |||||||||||||
Weighted average number of shares used in calculation: | |||||||||||||||||
Basic | 6,652,922 | 6,894,547 | |||||||||||||||
Diluted | 6,984,709 | 7,129,451 | |||||||||||||||
October 31, | April 30, | October 31, | ||||||||||
2019 | 2019 | 2018 | ||||||||||
Cash and cash equivalents | $ | 2,474 | $ | 1,752 | $ | 679 | ||||||
Finance receivables, net | $ | 451,606 | $ | 415,486 | $ | 409,714 | ||||||
Inventory | $ | 48,103 | $ | 37,483 | $ | 39,255 | ||||||
Total assets | $ | 575,367 | $ | 492,542 | $ | 487,396 | ||||||
Total debt | $ | 176,970 | $ | 152,918 | $ | 164,789 | ||||||
Treasury stock | $ | 245,598 | $ | 230,902 | $ | 218,197 | ||||||
Total equity | $ | 278,359 | $ | 260,510 | $ | 244,310 | ||||||
Shares outstanding | 6,566,321 | 6,699,421 | 6,822,763 | |||||||||
Finance receivables: | ||||||||||||
Principal balance | $ | 587,087 | $ | 543,328 | $ | 535,842 | ||||||
Deferred revenue - payment protection plan | (22,836 | ) | (21,367 | ) | (20,790 | ) | ||||||
Deferred revenue - service contract | (11,265 | ) | (10,592 | ) | (10,550 | ) | ||||||
Allowance for credit losses | (135,481 | ) | (127,842 | ) | (126,128 | ) | ||||||
Finance receivables, net of allowance and deferred revenue | $ | 417,505 | $ | 383,527 | $ | 378,374 | ||||||
Allowance as % of principal balance net of deferred revenue | 24.5 | % | 25.0 | % | 25.0 | % | ||||||
Changes in allowance for credit losses: | ||||||||||||
Six months Ended | ||||||||||||
October 31, | ||||||||||||
2019 | 2018 | |||||||||||
Balance at beginning of period | $ | 127,842 | $ | 117,821 | ||||||||
Provision for credit losses | 72,652 | 76,064 | ||||||||||
Charge-offs, net of collateral recovered | (65,013 | ) | (67,757 | ) | ||||||||
Balance at end of period | $ | 135,481 | $ | 126,128 | ||||||||